TaxTMI 
TaxTMI 
2011 (12) TMI 416
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....of the Appellant by invoking the provisions of section 147 of the Income - tax Act, 1961 ("the Act"). The ld. CIT (A) erred in not adjudicating the alternative ground raised by the Appellant before her with respect to allowability of exemption under section 11 of the Act. 4. There is a delay of 1747 days in filing these cross objections for both these assessment years. The assessee has filed affidavit for explaining the delay in filing the cross objections. 5. The assessee has pleaded that it is not conversant with the technicalities of the appeal proceedings; therefore, the assessee was under bonafide impression that it would be able to take up the issues in the appeals filed by the department. It is only when discussing the case with the counsel, the assessee realised that the assessee should have filed cross objection within 30 days of receipt of the notice of the department appeal. After coming to know about the correct legal position these steps were taken to file the cross objection on 24.8.2011. It has been pleaded that the delay is due to bonafide, though erroneous, impression about the legal remedy and therefore, due to the circumstances beyon....
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....affidavit state that the society is not well versed with the technicalities of the appeal proceedings before the Tribunal and therefore, under bonafide impression, it would be able to take up this issues in the appeals of the department. This statement in the affidavit is self-contradictory because on the one hand the assessee society claims to be not well versed with the technicalities of the appeal proceedings and on the other hand it was under bonafide impression it would take up these two issues in the appeals of the department. In our view, raising the issues, which are decided against the assessee in the appeals of the department under ITAT rules is more technical then filing of appeal or cross objection against the impugned order of the CIT(A), if the assessee is aggrieved. When the assessee engaged the counsel way back on 12.8.2008 then, in the absence of any detail, as on which date during the discussion with the counsel, the assessee realized that the cross objection should have been filed within 30 days. 7.1 In the ordinary course, the case is discussed when the brief is handed over to the counsel and a letter of authority/vakalathnnama is signed by the assesse....
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....of the assessee it appears that the assessee took the provisions of condonation of delay in a casual manner and granted. It is well settled that the Court helps vigilant and not indolent. Hence, we are of the view that the assessee has not disclosed a reasonable/good much less a sufficient cause for not filling the cross objections within the period of limitation and the delay of about 5 years. 10. In view of the above facts and circumstances of the case, we decline to condone the delay of 1747 days in filing the cross objections. Accordingly, the prayer for condonation of delay is rejected. Consequently, the Cross Objections filed by the assessee are dismissed as time barred. 11. The assessee has also raised an alternative plea that this issue can be raised under rule 27 of the ITAT Rules, even without filing the cross objection or appeal against the order of the CIT(A). 12. The ld AR of the assessee has placed reliance on the decision of the Hon'ble Jurisdictional High Court in the case of B R Bamasi v. CIT reported in 83 ITR 223. The ld AR of the assessee then submitted that the reasons recorded by the Assessing Officer for reopening of the assessme....
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....ceedings were invalid, but yet the Tribunal which hears that appeal would have no power to disturb or to set aside the order in favour of the appellant against which the appeal has been filed. The ground would serve only as a weapon of defence against the appeal. If the respondent has not himself taken any proceedings to challenge the order in appeal, the Tribunal cannot set aside the order appealed against. That order would stand and would have full effect in so far as it is against the respondent. The Tribunal refused to allow the assessee to take up this ground under an incorrect impression of law that if the point was allowed to be urged and succeeded, the Tribunal would have not only to dismiss the appeal, but also to set aside the entire assessment. The point would have served as a weapon of defence against the appeal, but it could not be made into a weapon of attack against the order in so far as it was against the assessee." 13.1 Thus it is clear from the observation of the Hon'ble jurisdictional High Court in the case of B R Bamasi (supra) that the effect of the plea raised by the assessee against the validity of the reopening would be only to the extent of defen....
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....udicated in the assessment proceedings u/s 143(3) for the AY 2001-02, then, it cannot be said that the Assessing Officer, at the time of reopening, has relied upon something, which was not in the knowledge of the assessee or knew to the assessee. When the assessee was very much aware and contested the assessment of exhibition income in the assessment proceedings u/s 143(3) for the AY 2001-02 then, the reopening of the assessment is founded on the material and information, which was part of the assessment and known to the assessee. 16.1 In the case relied upon by the ld AR of the assessee the only requirement is that there should be a tangible material on the basis of which the Assessing Officer can form a belief that the income assessable to tax has escaped assessment. 16.2 The Hon'ble jurisdictional High Court in the case of Multiscreen Media Private Limited v. Union of India reported in 324 ITR 54 has held as under: "What is material is that on the basis of a detailed inquiry which took place during the course of the assessment year 2005-06, the claim of the assessee of deduction of the entire expenses was not accepted and disallowance was made to th....
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....ot a mere inference to be drawn from the given facts. 16.4 The Hon'ble jurisdictional High Court also discussed the case of Supreme Court in the case of Ess Ess Kay Engineering Co Pvt Ltd reported in 247 ITR 818 and noted that the Supreme Court has held that it would be open to the Assessing Officer to reopen the assessment, based on the finding of fact made on the basis of fresh material gathered in the course of assessment proceedings for a subsequent year. 16.5 The Hon'ble High Court has also discussed a decision in the case of Anusandhan Investments Ltd vs DCIT reported in 287 ITR 482 and noted that in the said decision a division Bench has held that it is a well established position of law that an assessment can be reopened on the basis of information contained in an assessment of a subsequent year. The Hon'ble Jurisdictional High Court, while deciding the issue also considered the decision of the Supreme Court in the case of Kelvinator reported in 320 ITR 561. 17. In view of the above discussion and in the facts and circumstances of the case, we are of the considered opinion that the information and the material gathered during the course of asse....
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....te and asset Bureau of Indian Standard to promote textile standardisation; and (iv) to work in cooperation with the institution having similar aims and objects and encourage other for having similar aims to join such institutions and helped them. 21.2 The CBDT vide its notification dated 16.5.1994 had granted exemption to the assessee society u/s 10(23C)(iv) of the Income Tax Act 1961 for the assessment years 1993-94 to 1995-96. The said exemption has been further renewed from timed to time and lastly it has been granted for the AY 2003-04 and 2004-05. 21.3 During the financial year 2000-01, the assessee had organized an exhibition from 1.12.2000 to 10.12.2000 called as "International Textile Machinery Exhibitions 2000 (ITME) and earned a profit of Rs.12,52,75,120/-. The assessee has filed its return of income for Assessment Year 2001-02 on 30.7.2001 declaring total income at Nil as the exemption u/s 10(23C)(iv) was claimed. The assessment for the Assessment Year 2001-02 was completed u/s 143(3) on 30.1.2004 by treating the exempted income as business income. The assessee challenged the assessment order before the CIT(A). The CIT(A) vide his order date....
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....ence that the income arising from business is being utilized for any charitable cause therefore, holding of exhibition is a business as defined u/s 2(13) and is not an activity incidental to the object of society. Further, the assessee has not maintained separate books of account and the surplus has not been utilized for charitable purposes; hence, the assessee is not eligible for deduction u/s 10(23C)(iv). Accordingly, the Assessing Officer treated the income from exhibition as business income. Similar view was taken for the AY 1997-98 as well. 22. On appeal, the CIT(A) allowed the claim of the assessee for both the assessment years. 23. Before us, the ld DR has referred the assessment order and submitted that the assessee did not produce the books of account before the Assessing Officer. He has further submitted that admittedly no separate books of account are maintained by the assessee. The ld DR has pointed out that the Assessing Officer has recorded the fact that only extracts of computerized books were filed by the assessee; therefore, the assessee did not fulfil the conditions of notification issued by the CBDT u/s 10(23C)(iv)as well as sec. 11 of the I T....
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....e assessee cannot be compared with the cases, which falls u/s se. 11 and 12 of the Act. The ld AR has then submitted that the cases relied upon by the ld DR are distinguishable and not applicable in the case of the assessee. The assessee society has regularly and fully complied with all the terms and conditions stipulated in the notification issued u/s 10(23C)(iv) and therefore, the exemption granted by the CBDT cannot be withdrawn by the Assessing Officer. He has further submitted that though the assessee society is also registered u/s 12 of the Act, however, when the assessee has been granted exemption u/s 10(23C)(iv) then, the case has to be considered as per the notification issued u/s 10(23C(iv). The Assessing Officer cannot re-examine the objects of the assessee society once exemption was granted by the CBDT after satisfactions about the objects. The registration and exemption once granted cannot be denied by the Assessing Officer when the activity carried out by the assessee is as per the objects of the society. He has reiterated the contention and submitted that the amendment by which the proviso 13 to clause 10 (23C) has been inserted is applicable w.e.f 1.4.2003 and there....
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....roviso to clause 23C prescribes the procedure and the requirement for granting the exemption by the Central Govt by notification, which reads as under: "Provided further that the prescribed authority, before approving any fund or trust or institution or any university or other educational institution or any hospital or other medical institution, under sub-clause (iv) or sub- clause (v) or sub-clause (vi) or sub-clause (via), may call for such documents (including audited annual accounts) or information from the fund or trust or institution or any university or other educational institution or any hospital or other medical institution, as the case may be, as it thinks necessary in order to satisfy itself about the genuineness of the activities of such fund or trust or institution or any university or other educational institution or any hospital or other medical institution, as the case may be, and the prescribed authority may also make such inquiries as it deems necessary in this behalf:]" 24.3 Thus, it is clear that before notifying any fund, trust or institution, the Central Government or the prescribed authority, as the case may be, may call such record or in....
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....rs mentioned above otherwise than in any one or more of the forms or modes specified in sub section (5) of section 11; iii) This notification will not apply in relation to any income being profits and gains of business, unless the business is 9incidental to the attainment of the objectives of the assessee and separate books of accounts are maintained in respect of such business." 25.1 It has been made clear that this notification will not apply in relation to any income being profit and gain of business unless the business is incidental to the attainment of the objectives of the assessee and separate books of account are maintained in respect of such business. There is no dispute that the assessee has not maintained any separate books of account; but claimed that the only activity of the assessee is to carry out the exhibition and therefore, the books of account maintained by the assessee are separate books of account for exhibition activity. The Assessing Officer, for the AY 1997-98 has given details of the income relating to exhibition at page 2 and 3 of his assessment order as under: i) Space rental Rs.15,37,23,281 ii) Power installation....